A Report commissioned by the Ministry of Health, written by NZIER, has recently been getting air-time as an argument against taxing sugary drinks. However, the Report seems to us to be seriously flawed.

For example, the Report argues that soft drinks do not impose a negative externality. A negative externality is when consumption of a “good” (product) imposes costs on others. For example, it is universally accepted that tobacco smoking results in costs to society (eg increased health care spending), and therefore has negative externalities that justify tax. The same is true of sugary drinks increasing obesity/diabetes/tooth decay rates that then results in health costs to society. It is well recognised by economists that soft drinks impose such a negative externality, eg 2 ,5. Just as with alcohol and tobacco in nearly all high-income jurisdictions, this negative externality issue is a strong rationale for the state imposing a tax to help internalise the cost to society and cover some of the future costs to the health system.

This is the minor point in their argument, but it is worth noting potential confusion on externalities because even some economists mess this one up. The ability to offload health costs onto others, either through insurance where the premiums don’t distinguish between smallish changes in risk, or through a public health system, only generates technological inefficiency to the extent that it changes consumption.

Think of it this way. There is a total amount that somebody’s health care is going to cost. Imagine a world without a public health system and where private insurance premiums were perfectly adjusted to risk factors. Think about how much a person’s health care will cost in that world in total. Then add back in the public health system or a less granular private insurance system (or one where they’re compelled to use community ratings or somesuch). By how much does the total spending on that person’s healthcare increase because they’re able to offload the costs of unhealthy diets and the like onto other people? The increase in the risky behaviour associated with the cost-offloading imposes a technological externality.

But not all of the cost associated with that is a net social cost either! The person engaging in more of the risky activity gets some benefit from it, and that benefit needs to be netted out. The net social cost is the excess of the extra bit of cost over the extra bit of benefit. If you want a measure of the “social cost” of sugar or whatever, you should be looking to that little triangle rather than the total quantum of cost.

So we should never be looking at the total health costs associated with some kind of consumption – just at the cost associated incremental change caused by the ability to offload cost. All of the rest of the health cost is a pecuniary effect: it changes the identity of who pays for something rather than the amount paid. And even when we’re looking at the incremental increase in the cost, part of that too is a transfer rather than deadweight cost.

Ok, enough about that. We covered it in Jenesa’s Health of the State report, and I’d covered it here before.

The more substantial critique from Otago is that NZIER’s literature review was incomplete. At page 18, NZIER lays out its review method:

The literature reviewed for this report was identified by first searching for English-language peer-reviewed papers published in the last five years with evidence of an impact of a tax or levy on sugar-sweetened beverages, sugar or sugary foods through the following databases: Econlit, Pubmed/Medline, Google Scholar, National Bureau of Economic Research (NBER), Research Papers in Economics (RePEc), Te Puna. The search used a combination of keywords and phrases, including “sugar”, “soda”, “sugary”, “sugar-sweetened”, “beverage”, “drink”, “tax”, “levy”, “impact”, “effect”, “evidence”, “consumption” and “intake”. As searching is an iterative process, other keywords were introduced later, including “elasticities”, “price”, etc. and additional targeted searches were added for authors with multiple relevant publications, for papers that were already known to the reviewers, or for papers identified in the references of other included papers where these appeared relevant. Opinion pieces, letters to editors, media articles, presentations, and authors’ replies to comments on
published papers were excluded.

Keep that in mind. They’re only looking at English-language, peer-reviewed papers published from 2012-2017.

Now here’s Otago’s critique:

The literature reviewed by NZIER also seems rather incomplete. Eg, for the 9 studies that we are aware of which have examined the impact of real world sugary drink taxes on health – the NZIER Report refers to just one of them.6 The missed ones include studies suggesting health favouring associations for BMI/obesity7 8 9 10and for reduced cardiovascular disease11; along with studies showing no benefit for health.12 13 14 Yet even for two of the latter studies finding no association – the authors suggest the null finding is probably because of very low tax rates in the studied settings and they recommend higher tax rates.12 14 We are also surprised as to why the well-publicised report from the Australian Grattan Institute on sugary drink taxes published in 2016,2 was also missed by NZIER. Perhaps as a consequence of a suboptimal literature search strategy, NZIER have missed some key information and this may have limited the value of their conclusions.

Now let’s check those references.

6 is Fletcher et al, 2015, published in Health Economics. This was included in NZIER’s review.

7 is Fletcher et al 2010, published in Contemporary Economic Policy. Remember that NZIER’s review included papers published in the last five years. Since NZIER’s work was in 2017, the earliest inclusion date is 2012. So it was excluded.

But let’s have a closer look, just for fun. Because this one is fun.

Fletcher et al 2010 one does indeed suggest that while there is no effect of sugar taxes on outcomes, it could be because observed taxes are too low.

Now what Otago either didn’t know or didn’t want you to know is that Fletcher et al 2015 is an answer to Fletcher et al 2010. The 2010 work posited that there could be bigger effects at higher tax rates – that there’s a nonlinear response. The 2015 paper tests for that nonlinear response and rejects the hypothesis that the 2010 paper suggested for its null finding – there’s no evidence of nonlinear effects within the range of observed taxes.

So, the question for the Otago people then: is there any good reason to highlight a mechanism that the authors disprove in later work? I can think of a few bad reasons. And the only good way to include it would be with a health warning that the mechanism was kinda torn apart by the authors’ later work.

But it’s all kinda moot since the study was restricted to work in the past five years.

8 is Kim et al 2006. That’s six years before NZIER’s window.

9 is a master’s thesis from 2013. I think that’s excluded by the restriction to peer-reviewed papers, but it’s perhaps debatable for a thesis that’s made it through committee.

10 is a 2010 paper, so two years before the window.

11 is a 2015 paper published in the Journal of the American Heart Association. So it meets the criteria. So it’s arguably a fair call that it should have been caught in the search. It wouldn’t have much changed the result since it’s just a cross-sectional study across US states suggesting that states with higher taxes on soda also have lower odds of poor cardiovascular health, but it would be a pretty big stretch to draw anything causal from that. You need at least panel data work identifying on state-level changes in soda taxes. Otherwise how could you tell that other things aren’t driving both policy and health outcomes?

12, 13, and 14 were all published in 2010 or 2009, and so are outside of the review window.

And 2 is a Grattan Institute report that would have been excluded as it wasn’t a peer-reviewed journal article. Otago didn’t chide NZIER for missing the Initiative’s report on sugar taxes, but it would also have been properly excluded as it also wasn’t a peer-reviewed journal article.

Ok. So the Otago People are mad that NZIER excluded a bunch studies that the Otago People know about. They didn’t bother to check the exclusion criteria in the NZIER’s paper, and instead jump to the next paragraph claiming that NZIER is beholden to Big Industry interests even though this report was MoH funded.

On checking, it looks like NZIER failed to include one study that they should have included, but including it wouldn’t have made a darned bit of difference. I suppose the Otago People could have complained that the review window was too narrow – I don’t know why it was set at five years but that seems a reasonable window where sugar taxes are pretty new. But the complaint as it stands seems more than a bit off.

My disclosure: the Initiative is funded by a broad range of corporate members including ones the Otago People wouldn’t like. Their membership has zero influence on my views of the Otago People’s work.

In this fourth blog that features the BODE3 Interactive League Table, we look at substantive findings across the interventions (so far) in the league table. We use graphs from the league table to cautiously explore (for fear of over-generalizing) what approaches might typically generate the most health gain and be best value-for-money.

Prevention versus treatment

The figure below shows quality-adjusted life-years (QALYs; discounted at 3% per annum) gained for selected interventions. Substituting 25% of the salt in processed foods with potassium and magnesium salts, colorectal cancer screening and increasing tobacco taxation all dwarf treatments like trastuzumab (Herceptin), which is currently approved for treating early-stage breast cancer. We do not recommend foolishly jumping to abandon such treatments (!), and it must be noted that:

The treatment interventions are for patients diagnosed in 2011 only, whereas the prevention interventions continue to benefit the population in future years. However, for discounted QALY gains, these particular preventive interventions will always have much greater QALY gains that Herceptin for breast cancer patients in the next 50+ years combined.

The health gains from prevention are often decades away (although colorectal cancer screening gets big health gains relatively quickly), and society tends to value health gains closer in time (that’s why discounting is standard international best practice for such analyses).

So let’s look at the cost-effectiveness in terms of cost per QALY (figure below). The preventive interventions are often cost-saving because the future health system cost savings are (often much) more than the initial intervention costs – even with 3% discounting per year, and even with people living longer and so using some additional healthcare resources).

Voluntary versus mandatory interventions

In BODE3 we have started to compare voluntary with mandatory versions of the same intervention. No surprises, mandatory interventions gain (somewhat) more health, and more cost-effectively even when the mandatory intervention includes the cost of passing a new law. Nevertheless, voluntary interventions might still sometimes be the best choice e.g., if there was a genuine need for intervention feasibility to be tested by a progressive industry (but in this sodium case we known that industry can easily achieve major reductions in sodium levels in processed foods – from both NZ and extensive international experience). Furthermore, we suspect that some laws might not necessarily be best for public health overall (e.g., perhaps compulsory cycle helmets discourage cycling and reduce the viability of bike-share schemes – a topic that needs research).

Targeted versus untargeted

We target health interventions all the time. For example, dietary counselling to obese people only, or a screening programme to ages where the cost-effectiveness is maximal (e.g. 50-74 year olds for colorectal cancer). More of these examples will be in the BODE3 Interactive League Table in due course. In this blog, we just focus on trastuzumab (Herceptin) and targeting by biological type of breast cancer. Only women with the HER2 receptor (should) get trastuzumab, but effectiveness in terms of QALYs per woman treated varies enormously based on hormone receptor status of the breast cancer. A ‘good prognosis’ breast cancer that is both oestrogen and progestogen receptor positive already has good five-year survival, and therefore there is less to gain …. and therefore is less cost-effective. The figure below shows this variation in cost-effectiveness. This variation, or what we call ‘heterogeneity’, also varies by age – see a past blog on this for trastuzumab. The points here are that the league table allows you to see this heterogeneity (where we have modelled it), and there are implications for the health system – in a precision medicine world we should also have more precise funding decisions so that where additional health benefits are small, resources can be freed up to use on other interventions that will bring relatively bigger health benefits for the population.

Summary

In this blog we have show-cased some themes that are suggested with current interventions at the BODE3 Interactive League Table. Some themes are obvious, for example, an intervention for people with an uncommon disease in one calendar year only is unlikely to generate (anywhere) near as much health gain as an intervention across the whole population and/or for many years. Other themes may be obvious if you had already thought about it, for example, that mandatory interventions tend to have bigger impacts than voluntary interventions. But other themes – or perhaps findings – you may not have realized without looking further, for example, the huge variation in the cost-effectiveness of trastuzumab (Herceptin) when targeted by age and biological type of the breast cancer.

There are of course exceptions to these patterns and which we hope to consider further in future work. You may wish to discover more yourself here.

]]>https://sciblogs.co.nz/public-health-expert/2017/09/05/bode3-league-table-prevention-treatment/feed/0The costs of antimicrobial resistancehttps://sciblogs.co.nz/guestwork/2016/11/25/costs-antimicrobial-resistance/
https://sciblogs.co.nz/guestwork/2016/11/25/costs-antimicrobial-resistance/#respondFri, 25 Nov 2016 03:02:56 +0000https://sciblogs.co.nz/?p=236471What might the economic costs of antibiotic/antimicrobial-resistant infections be in New Zealand? The simple answer is – we don’t know. As far as I’m aware, there’s been no New Zealand studies publicly disseminated on this topic. Therefore, we have to look overseas for reported studies.

While the US Centers for Disease Control and Prevention (2013) stated the total economic cost of antibiotic-resistant infections to the US economy was difficult to calculate, they cited year 2000 estimates provided by the Alliance for the Prudent Use of Antibiotics (APUA), an international non-governmental organisation. Based on ~900,000 cases of antibiotic-resistant infections a year, the APUA estimates ranged as high as US$20 billion in excess direct healthcare costs, with additional costs to society for lost productivity as high as US$35 billion a year. Given the number of cases reported has more than doubled over the past decade – CDC recently estimated that over 2,049,442 people are sickened every year with antibiotic-resistant infections, with at least 23,000 dying annually, who could once be easily cured – costs will have risen substantially. Furthermore, drug resistance related to viruses such as HIV and influenza was not included, nor was drug resistance among parasites such as those that cause malaria, so the true costs are likely even higher.

More recently, the UK government commissioned a review on antimicrobial resistance, in 2014, chaired by macroeconomist Jim O’Neill. As part of the two-year independent review, they estimated losses to the world economy caused by reductions to the size and efficiency of the labour force resulting from three resistant hospital-acquired infections (Escherichia coli, Klebsiella pneumoniae, and Staphylococcus aureus) and three major infectious diseases (HIV, tuberculosis, and malaria). By 2050, they projected that in a world without effective antimicrobial therapy, gross domestic product (GDP) per capita in high-income countries would be 2.3% lower each and every year compared to a world with no resistance. An older 2005 study led by the London School of Hygiene and Tropical Medicine (Richard Smith and colleagues) estimated current losses attributable to a level of MRSA (alone) of 40% in the UK at 0.4% to 1.6% of GDP – thus suggesting the review projections might be on the low side.

The review team recognised that their projected GDP losses will be an underestimation of the overall costs of antimicrobial resistance for several reasons. First, only six conditions were included as the research team was unable to identify sufficiently robust data on others. The worldwide extent of the problem is hard to pinpoint since data are incomplete, and there’s no standard for tracking such infections and associated deaths. That also makes totaling the economic impact — and exact death count — difficult to do. Second, people may choose not to undergo certain procedures because of the heightened risks involved, resulting in further morbidity and mortality. For instance, most intensive care medicine, and surgical procedures such as caesarean sections, organ transplantations, removing tumours, and hip replacements would not be possible if you don’t have effective antibiotics available that can deal with the infections that will result – modern medicine would be paralysed. And third, costs in the healthcare system and from reduced activity in travel and trade were also not included.

It’s possible we could slice and dice the costs above and apportion them to the New Zealand population. But the different methodological approaches taken, dissimilar healthcare systems, and varying usage of antibiotics in human and animal health may mean the results are not generalisable.

Given that the dangers of resistance are widely acknowledged, why hasn’t more been done in the past? One reason is that antibiotic resistance has fallen victim to evidence-based policy making, which prioritises health problems by economic burden and cost-effectiveness of interventions. While the estimated costs of antibiotic resistance are substantial, they have not been as high as in many (competing) therapeutic areas. Thus health economists have been unable to show that antibiotic resistance costs enough to be a health priority. However, the potential future costs of a world without effective antibiotics would be much larger than the cost of antimicrobial resistance today – one could draw an analogy with climate change – though it is currently not clear to what extent, or how quickly, the future burden of antimicrobial resistance will grow. The O’Neill review stated that antimicrobial-resistant infections (due to the six above conditions) are responsible for ~700,000 deaths globally each year, with this number likely to be an underestimate due to poor reporting and surveillance. By 2050, these deaths are projected to rise to 10 million a year: more than global annual cancer deaths.

International co-ordination towards the goals outlined in the Final Report and Recommendations of the Review on Antimicrobial Resistance (just published in May) is a way forward. In the words of an esteemed UK colleague, rather than see expenditure on antimicrobial policies as a cost, we should think of it as an insurance policy against a catastrophe; albeit one which we hope will never happen.

References

US Centers for Disease Control and Prevention. Antibiotic resistance threats in the United States, 2013. Atlanta: CDC, Department of Health and Human Services. 2013.

O’Neill J. Review on antimicrobial resistance. Antimicrobial Resistance: Tackling a Crisis for the Health and Wealth of Nations. 2014.

About

William Leung is a lecturer in health economics at the University of Otago, Wellington, and is currently leading the economic evaluation of SHIVERS, a CDC-funded influenza project.

This article was originally published onTe Punaha Matatini as part of InfectedNZ – an online campaign to raise awareness about infectious diseases and antimicrobial resistance. Read theoriginal article.

This is a further edition of the already highly valued nursing text exploring social, cultural and political issues affecting individual and community health. As such it continues to be a gift to the profession; academics teaching in the area, students and primary health care clinicians alike.

While primarily a nursing text, this book demonstrates that both the how and why focus of healthcare and resourcing must be on more healthcare, rather than more medical care, in order to reduce heath demand and ensure everyone reaches their full potential, regardless of health status. As such it provides a pathway towards implementing a comprehensive primary health care focus throughout the health system and should be compulsory reading for health economists, policy makers, as well as health practitioners and advocates.

The text effortlessly and skillfully bridges the New Zealand and Australian health and service environments. In so doing it enriches its central thesis, which is to explore and expand a vital discussion of health as a product of the interaction between people and their environment.

The book is written in an extremely accessible style yet despite its seeming simplicity it deals comprehensively with a broad and in- depth treatment of every possible aspect of primary health care.

This edition of Community Health and Wellness features a common family case study running throughout the text. The Miller family spans Australia and New Zealand, providing vivid examples of primary health care concerns in both countries. This technique increases the applicability of the more theoretical components of the book and will increase its appeal and relevance to undergraduate students

The text includes child health services and adolescent needs, the challenges of accessing care, contemporary family issues and ageing. Important components such as gender and cultural inclusiveness are thoroughly addressed and made highly applicable to service delivery. Health literacy, health promotion and health education are also made accessible and relevant. A real strength of the text is the attention to evidence-based policy, which is topical and not always considered as thoroughly elsewhere.

The text could have been further strengthened by some reference to the theoretical notion of medicalisation. Sociological literature makes clear that the tentacles of medical hegemony are a significant impediment to the full implementation or utilisation of the strengths of primary health care services. They may also be the reason why funding continues to resource medical solutions rather than strengthening community health resources.

In summary the book offers readers a degree of global focus with special attention to NZ and Australia. All of the core aspects such as the Ottawa Charter, the Jakarta Declaration and the Bangkok Charter are included as contemporary health promotion guidelines for practice. The life span approach ensures that the full breadth of primary health care characteristics is applied

The pedagogical approach in this text is a real strength. Each chapter or section offers opportunities for deeper engagement, interaction and reflection. Extensive and very up to date references offer the reader easy access to further reading in each section.

Anne McMurray and Jill Clendon are to be congratulated on their ongoing partnership in continuing to keep this valued text topical and relevant. It is a vital contribution to the discipline.

Jenny Carryer is Professor of Nursing at Massey University and Executive Director of the College of Nurses Aotearoa. She chairs the National Nursing Organisations’ Leadership Group and has served on numerous Ministry of Health Advisory Groups.

]]>https://sciblogs.co.nz/scibooks/2015/01/21/nursing-text-a-key-contributor-to-community-health/feed/0QOTD: Andrew Dickson and Bill Kaye-Blakehttps://sciblogs.co.nz/the-dismal-science/2014/07/07/qotd-andrew-dickson-and-bill-kaye-blake/
https://sciblogs.co.nz/the-dismal-science/2014/07/07/qotd-andrew-dickson-and-bill-kaye-blake/#respondMon, 07 Jul 2014 02:20:54 +0000http://www.tvhe.co.nz/?p=11573While the blog was out of action I noticed a lot of people linking the following article by Andrew Dickson and Bill Kaye-Blake (from Groping to Bethlehem).

All the links focused on how the article made the case for a tax on sugar. That is fine and all, it was an externality case that we can discuss, appeal to evidence and value judgments on, and then decide whether we agree or not. In fact, I get the impression that is the exact point that the authors are raising after setting up the pro-argument.

However, I didn’t get the impression that many people made it to the second half of the article (given the way it was used) – and the second half was absolutely glorious.

The second half starts with this:

But a major focus of the calls from many “health” campaigners is the impact that taxing these drinks might have on the contested term “obesity”.

The focus on obesity reveals the other public health fantasy: socially engineering perfect bodies.

If, for instance, we decided to tax sugar-sweetened beverages and had a subsequent reduction in diabetes and improvement in dental health, would the tax be judged unsuccessful if BMI didn’t change?

In fact, diabetes and poor dental health affect people of all body sizes, who can all be healthier, regardless of BMI. But if a sugary drink tax collected enough healthcare funding to pay for diabetes and dental care, would public health campaigners still demand more just to make people slimmer?

These are important questions. If we are actually thinking about the externality, an “output target” in terms of rates of obesity and the average BMI makes very little sense. Instead, the focus should be on the link between consumption and disease – the change in BMI’s or obesity rates is symptomatic here.

This leads to the question:

What we must ponder is why public health campaigners and researchers feel the need to complicate a very simple relationship by dropping in the term obesity whenever possible, despite its longstanding logical and ideological problems.

Or, put differently: why are they so determined to define and control body mass when they could just target disease?

I also struggle with this question – why does it often feel that the “costs” are ex-post justifications for targeting something that a group of people just don’t like?

This IS NOT an argument against active policy based on improving individual well-being and based on clear knowledge of the value judgments involved – in fact I am a huge fan of the introduction of mechanism design in this area, as there is a lot of self-reporting by individuals that obesity is something they are very unhappy with in their own lives.

But the reason I keep reiterating this is that:

Many of the underlying justifications for targeting obesity are being based on the authors normative belief’s about whether others should be obese – same arguments hold with alcohol, tobacco, and other “sin goods”. Yes there are significant issues of choice and reasonable knowledge, but it is a long bow for this to lead us to an oversimplistic tax argument.

As an individual I strongly, and totally, disagree with this inherent value judgment. A willingness to justify social action to punish individual difference is something I find morally abhorrent. Banning and constraining individual choice because it doesn’t fit our view of what a sensible individual would do is something that is ethically wrong, prior to any consideration of outcomes. I know that is a pretty deontological view of policy, but if we are going to consider things normatively without just thinking our view of societies social welfare function is totally an utterly right it is necessary.